Tensions Rise as U.S. Imposes ‘Nuclear Option’ on Iran’s Economy

Reacting to American threats to crater their economy, Iran’s first vice president Mohammad-Reza Rahimi said last week that the Islamic Republic would retaliate by blocking all oil shipments through the strategic Strait of Hormuz.

Following a sustained covert terror campaign by the U.S. and Israel, Rahimi declared: “If they impose sanctions on Iran’s oil exports, then even one drop of oil cannot flow from the Strait of Hormuz.”

On Saturday, President Obama took that step and signed crippling sanctions legislation as part of the Pentagon’s massive $662 billion 2012 National Defense Authorization Act (NDAA).

It should be noted that the NDAA, which threatens war on Iran, also calls for the indefinite detention of so-called “terrorist” suspects by the military, including American citizens, who can now be held without charge or trial.

Dubbed the “nuclear option” by critics and supporters alike, the legislation passed with overwhelming support from “conservative” Republicans and “liberal” Democrats in Congress and targets foreign corporations that do business with Iran’s Central Bank.

Under the guise of “punishing Iran” for an unproven nuclear weapons program the bill is designed to “collapse the Iranian economy” according to its chief sponsor, Illinois Republican Senator Mark Kirk.

As pointed out by numerous analysts and proliferation experts, Iran’s research related to nuclear weapons ended more than a decade ago. Even the highly-politicized report issued by the International Atomic Energy Agency (IAEA) in November under pressure from Washington, was forced to concede that Iran has not diverted material into a covert weapons program.

Two days after becoming law, Iran’s currency hit a record low against the U.S. dollar.

According to the Associated Press the riyal “hovered around 16,800 riyals to the dollar, marking a roughly 10 percent slide compared to Thursday’s rate of 15,200 riyals to the dollar. The riyal was trading at around 10,500 riyals to the U.S. dollar in late December 2010.”

“The sanctions target both private and government-controlled banks–including central banks–and would take hold after a two- to six-month warning period, depending on the transactions,” Reuters reported.

“Foreign central banks which deal with the Iranian central bank on oil transactions could also face restrictions,” AFP disclosed, “sparking fears of damage to US ties with key nations such as Russia and China which trade with Iran.”

The new law would make it virtually impossible for Iran to collect payments for energy exports severely damaging its already-fragile economy while setting the stage for a military confrontation.

In the event hostilities break out, energy analysts have warned that the price of oil could spiral to $250 barrel and would have a devastating effect on the crisis-ridden global economy.

Reflecting the skittishness of global energy markets, “crude futures headed for a third yearly advance on speculation escalating tension in the Middle East may disrupt supplies,” Bloomberg News reported, and “surged to $101.77 a barrel on Dec. 27, the highest intraday price since Dec. 7.”

Hair-Trigger Alert

American threats have been taken seriously by the Tehran government.

Iran is currently conducting a 10-day naval exercise in the Persian Gulf and officials have said they would react forcefully should the United States threaten their ability to conduct operations in defense of their territorial sovereignty.

“Closing the Strait of Hormuz is very easy for Iranian naval forces,” Sayyari said. “Iran has comprehensive control over the strategic water way.”

In response, the Pentagon’s chief spokesperson George Little said “that any interference by Iran in the strait would ‘not be tolerated,’ stressing that the region was ‘an economic lifeline for countries in the gulf’,” the Los Angeles Times reported.

Iranian officials fired back. Hossein Salami, a senior commander of Iran’s Revolutionary Guard Corps said that “Americans are not in a position whether to allow Iran to close off the Strait of Hormuz.”

“Any threat will be responded by threat,” Reuters reported. “We will not relinquish our strategic moves if Iran’s vital interests are undermined by any means.”

Iran claimed Sunday that its naval forces had successfully test-fired a new medium-range surface-to-air missile during the exercises in the Strait of Hormuz.

Rear Admiral Mahmoud Mousavi, the spokesperson for the exercises, claimed that the missile was “designed and manufactured by Iranian experts, [and] is equipped with state-of-the-art technology and an intelligent system that enables it to target radio emission sources and thwart jammers,” according to Press TV.

“On Friday,” Xinhua disclosed, “Mousavi said that the country’s naval units will fire different long- and short-range land-to-sea, surface-to-surface and surface-to-air missiles during the power phase of the exercises in the strategic Strait of Hormuz, starting Saturday.”

“He added that Iran’s submarines will also hit the pre-determined targets,” Xinhua reported, “using domestically-manufactured torpedoes, during the exercises.”

On Monday, the last day of the maneuvers, Deutsche Welle reported that the Iranian navy “test-fired a cruise missile with stealth technology in a move sure to ratchet up tensions with the West.”

While claims that new Iranian missiles are stealth-equipped cannot be independently verified, it should be noted that prior to the intact capture of an advanced RQ-170 Sentinel spy drone flown by the CIA in early December, Western security experts had downplayed Iran’s technological capacity to employ sophisticated electronic warfare tactics.

According to reports, “Iran on Monday successfully tested a ‘Ghader’ surface-to-surface cruise missile on the last day of war games near the Strait of Hormuz in the Persian Gulf.

“The ‘Ghader,’ which means ‘capable’ in Farsi, is an upgraded version of an existing missile that had a range of 200 kilometers (125 miles) and could travel at low altitudes.”

Deutsche Welle observed that the “war games and the missile firing are seen by political analysts as a practice run for closing the Strait of Hormuz if the West were to block Iran’s oil sales.”

Reiterating that message, a senior Iranian lawmaker, Kazem Jalali, told Press TV Monday that “if faced with a threat Iran will definitely use the defensive potential of the strategic Strait of Hormuz.”

“Iran has warned,” Press TV noted, “that in case Western threats of imposing an oil embargo on the Islamic Republic materialize, it reserves the right to respond by choking the oil flow through Hormuz, arguing that the free flow of oil must be for all or for none.”

Robert Naiman, the policy director at the Just Foreign Policy think-tank, told Russia Today that “Tehran had to call navy maneuvers at this time as otherwise it would have been perceived as a country unable to defend itself. The embargo on Iran’s oil exports proposed by the US necessitates an active response.”

“It is understood in the international political discourse that an embargo is an act of war. If it really is the policy pursued by the US and Western Europe to try to cut off Iran’s oil exports, then that is an act of war. It would not make sense for Iran to roll over,” Naiman told RT.

As analyst Peter Symonds pointed out on the World Socialist Web Site, “Having waged wars of aggression against Afghanistan and Iraq and backed the NATO bombing of Libya, the US is now deliberately and recklessly raising tensions in the Persian Gulf by threatening severe penalties against any foreign company doing business with Iran’s central bank, thereby effectively blocking Iranian oil exports.”

“The media is silent on Washington’s rank hypocrisy in demanding an end to Iran’s nuclear programs,” the socialist critic noted, “while fully backing the only nuclear-armed state in the Middle East–its ally Israel, which is notorious for its wars of aggression.”

“The glaring double standard,” Symonds observed, “only underscores the fact that Obama’s belligerence towards Iran is no more about the ‘nuclear threat’ than the wars in Afghanistan and Iraq were about ‘terrorism’ and WMDs.”

U.S. Arms Sales

In the face of escalating Western threats, Tehran Times reported Friday that Foreign Minister Ali Akbar Salehi said that “Iran is ready to resume negotiations with the 5+1 group (the United States, Britain, France, Russia, China, and Germany).”

According to the paper, Salehi’s remarks came during a meeting with China’s Vice Foreign Minister Zhai Jun on Thursday.

“The Chinese vice foreign minister,” Tehran Times averred, “emphasized that the dispute over Iran’s nuclear issue should be resolved through negotiations, adding that Beijing is opposed to the adoption of new sanctions on Tehran.”

Bloomberg News reported Monday that “the country’s top nuclear negotiator, Saeed Jalili, plans to send a letter to European Union foreign policy chief Catherine Ashton, which may be followed by a new round of talks, Mehr reported on Dec. 31, citing Iran’s ambassador to Germany, Alireza Sheikh Attar.”

“The EU,” Bloomberg reported, “continues to pursue a ‘twin-track approach’ and is ‘open for meaningful discussions on confidence-building measures, without preconditions from the Iranian side’,” EU spokesperson Michael Mann said last week.

Despite Iran’s willingness to renew direct talks, the Obama administration announced a $30 billion arms deal with Saudi Arabia and agreed to sell 84 advanced F-15SA fighter jets to the repressive House of Saud.

“Though the White House said the deal had not been accelerated to respond to threats by Iranian officials in recent days to shut off the Strait of Hormuz,” The New York Times reported that “its timing is laden with significance, as tensions with Iran have deepened and the United States has withdrawn its last soldiers from Iraq.”

Andrew J. Shapiro, the U.S. assistant secretary of state for political-military affairs told the Times that “this sale will send a strong message to countries in the region that the United States is committed to stability in the gulf and the broader Middle East.”

However, when the global godfather speaks of “stability,” what the U.S. means is the maintenance of a system of exploitation and resource extraction controlled by American multinationals, backed by the threat of covert and overt aggression by Washington.

Accelerating the encirclement of Iran by U.S. allies, Reuters reported that the “United States has signed a $3.5 billion sale of an advanced antimissile interception system to the United Arab Emirates, part of an accelerating military buildup of its friends and allies near Iran.”

Pentagon press secretary George Little said that the deal “is an important step in improving the region’s security through a regional missile defense architecture.”

The sale of the Theater High Altitude Area Defense System (THAAD), manufactured by mega merchant of death Lockheed Martin, is described as “the only system designed to destroy short- and intermediate-range ballistic missiles both inside and outside the Earth’s atmosphere.”

“The United States,” Reuters disclosed, “under the government-to-government deal, will deliver two THAAD batteries, 96 missiles, two Raytheon Co AN/TPY-2 radars plus 30 years of spare parts, support and training with contractor logistics support to the UAE,” the Pentagon spokesperson said.

In another pending arms sale, Reuters reported that the Obama regime “formally proposed in November to sell 600 ‘bunker buster’ bombs and other munitions to UAE in an estimated $304 million package to counter what the Pentagon called current and future regional threats.”

Sale of these munitions are widely believed to be essential should the U.S., Israel, NATO and their regional Gulf allies, including Saudi Arabia, decide to attack Iran, and would be deployed for targeting “hardened” command-and-control sites in the Islamic Republic.

As analyst Mahdi Darius Nazemroaya pointed out on Global Research, Washington’s long-standing plans for “regime change” in the Middle East and North Africa are part of an ongoing cold war between Tehran and Washington and that the “destabilization campaign being waged against Iran, Iraq, Syria, and Lebanon are also a critical front in this cold war.”

“The Obama Administration has used 2011 to unleash Washington’s so-called ‘Coalition of the Moderate’ against the Resistance Bloc,” Nazemroaya wrote, “which pins together all the countries and forces united by their opposition to U.S. and Israeli hegemony in the Middle East-North Africa (MENA) region.”

“The two camps that are becoming more and more visible in the MENA region are falling along the lines of what Washington, Tel Aviv, and NATO planned on forming after the 2006 Israeli defeat in Lebanon as a means of tackling Iran and its allies,” Nazemroaya observed.

“In 2007, the United States of America, represented by Secretary of State Condoleezza Rice and Defence Secretary Robert Gates, held a meeting in Cairo under the ‘GCC + 2’ formula with the Gulf Cooperation Council–Saudi Arabia, Qatar, Bahrain, Kuwait, the U.A.E., Oman, and Qatar–plus Egypt and Jordan to form a strategic and all encompassing front against Iran, Syria, and their regional allies.

“This ‘Coalition of the Moderate’ formed by Washington was a direct extension of NATO that also included Israel and Turkey as important and central participants,” Nazemroaya wrote.

In this context, stepped-up sales of advanced weapons systems to so-called “moderate” regimes are, contrary to American propaganda, not the result of a supposed “threat” from Iran but precisely are intended to hasten “regime change,” either through National Endowment for Democracy (NED) sponsored “color revolutions” or overt military aggression.

Last week, Antifascist Calling disclosed, citing reports from the Israeli, Russian and Turkish press, that the U.S. has doubled the “special aid” it gives to Israel for long-range anti-ballistic air defense systems and associated radars.

The $235.7 million deal approved by Congress, Israel National News noted was “for the Arrow 3 anti-ballistic long-range air defense system, for the program to improve the basic capabilities of the Arrow systems, and for the David’s Sling mid-range anti-missile system.”

And as The Jerusalem Post reported, the arms sale comes on the heels of Israeli plans “to hold the largest-ever missile defense exercise in its history this spring amid Iranian efforts to obtain nuclear weapons.”

Defense correspondent Yaakov Katz disclosed that “Lt.-Gen. Frank Gorenc, commander of the US’s Third Air Force based in Germany, visited Israel to finalize plans for the upcoming drill, expected to see the deployment of several thousand American soldiers in Israel.”

The Jerusalem Post noted that “the drill, which is unprecedented in its size, will include the establishment of US command posts in Israel and IDF command posts at EUCOM headquarters in Germany–with the ultimate goal of establishing joint task forces in the event of a large-scale conflict in the Middle East.”

“The US,” Katz reported, “will also bring its THAAD (Terminal High Altitude Area Defense) and shipbased Aegis ballistic missile defense systems to Israel to simulate the interception of missile salvos against Israel,” and that the “American system will work in conjunction with Israel’s missile defense systems–the Arrow, Patriot and Iron Dome.”

Although “casually heralded as ‘military aid,'” Global Research analyst Michel Chossudovsky observed that “the project consisted in strengthening the integration of Israel’s air defense system into that of the US, with the Pentagon rather than Israel calling the shots.”

Advanced ballistic missile early warning radar systems have also been installed in Turkey and, as with the Israeli deployment, the U.S. is clearly in the driver’s seat.

In late December, Hürriyet Daily News reported that “NATO’s Malatya-based ballistic missile early warning radar system … will become operational next week, before the end of this year,” a “senior Turkish official” said.

“The agreement signed between Ankara and Washington calls for the deployment of a U.S. AN/TPY-2 (X-band) early warning radar system at a military installation at Kürecik in Malatya as part of NATO’s missile defense project,” Hürriyet reported.

Similar to the Israeli agreement, Hürriyet disclosed that “a Turkish senior commander is to be posted at NATO’s headquarters in Germany, where the intelligence gathered through the radar system will be processed.”

Global Energy Hegemony

The precipitating factor propelling Washington’s machinations against Tehran is the severe economic decline of the United States vis-à-vis their imperialist rivals, above all China and Russia.

American aggression in the context of the current global economic crisis, has nothing whatsoever to do with moves to stop nuclear proliferation, let alone advance the cause of “freedom and democracy” in the Middle East, or anywhere else for that matter.

Rather, belligerent threats and U.S. state-sponsored terrorism against the Islamic Republic are part and parcel of Washington’s long-standing strategic goal of hegemonic control over the energy-rich regions of Africa, Central Asia and the Middle East.

Dialing-up tensions, the United States is gambling that a war with Iran, particularly during a critical election year with all major candidates from both capitalist parties (Ron Paul being a notable exception) outbidding one another in terms of their bellicose rhetoric, hope to divert attention from ongoing attacks on the standard of living and democratic rights of the working class by kleptocratic American elites.

Imperial military adventurism for control over the world’s energy supplies however, raises the specter of an unintended conflict with rivals China and Russia, who also face renewed threats from Washington, a confrontation that could have unintended and potentially catastrophic consequences.

Tom Burghardt is a researcher and activist based in the San Francisco Bay Area. In addition to publishing in Covert Action Quarterly and Global Research, an independent research and media group of writers, scholars, journalists and activists based in Montreal, he is a Contributing Editor with Cyrano’s Journal Today. His articles can be read on Dissident Voice, Pacific Free Press, Uncommon Thought Journal, and the whistleblowing website WikiLeaks. He is the editor of Police State America: U.S. Military “Civil Disturbance” Planning, distributed by AK Press and has contributed to the new book from Global Research, The Global Economic Crisis: The Great Depression of the XXI Century.